Sunday, July 19, 2015

The Euroskeptic Vindication - The New York Times

The Euroskeptic Vindication - The New York Times:



 "One theme I’ve returned to often in this blog is that far from failing in the crisis, more or less conventional Hicks/Keynes macroeconomics — whether or not you dress it up in New Keynesian algebra — has performed very well. The quiescence of interest rates and inflation despite large budget deficits and huge increases in the monetary base, the strong negative correlation between fiscal austerity and growth, all have been just what someone who knew his or her IS-LM and took it seriously would have predicted. Anti-Keynesians keep making more or less desperate efforts to refute this proposition, usually by taking something I said out of context and pretending that something that happened for one year somewhere or other is contrary to what the Evil One claimed. But the overall shape of events has been very Keynesian, and very much at odds with alternative stories."



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